Mark Collins – Canadian Oil Industry Heartbreak

Alberta can no longer fuel the growth of Canada’s economy without the federal government’s help building a new pipeline, [left-leaning] Premier Rachel Notley warned in a televised address on Thursday [April 7].

A week before her NDP government’s first full budget, Ms. Notley cautioned Albertans that the province is facing a $10-billion deficit and won’t see a balanced budget for years to come. To help Alberta’s economy recover, she vowed to get a pipeline approved from the province’s oil sands to one of Canada’s coasts [see “Canadian Economy: Hydrocarbon Heartbreak, Pipelines…and Worse“]…

At a news conference earlier this year, Prime Minister Justin Trudeau said he supported bringing Alberta’s oil to new markets. However, he has said that the federal government needs to be backed up by a pipeline review that Canadians can trust [more here and here–you be the judge on the PM’s position]…

Capital spending in the Canadian oilpatch sector is set to drop by US$50 billion since 2014 — the largest two-year-decline since at least 1947 — thanks to the protracted plunge in oil prices, the Canadian Association of Petroleum Producers said Thursday…

Investments were expected to decline 62 per cent to $31 billion in 2016, from a record $81 billion in 2014, and $48 billion in 2015, according to CAPP, which represents the oil and gas industry. The oilsands may see investments drop to around $17 billion this year, half of the figure spent in 2014.

With oil prices dropping 65 per cent in the past 18 months, it has been a rough period in places like Calgary and Fort McMurray with 110,000 direct and indirect jobs being lost. Stunned by the oil price collapse, investors in the Canadian oil and gas sector have also had to endure a sea-change in the regulatory framework in Alberta and at the federal level over the past year, including aggressive carbon emission capping targets…

Last June, CAPP cut its output growth forecast in the oil sector by a million barrels per day to 5.3 million bpd by 2030, compared to 3.7 million bpd in 2014 due to a precipitous drop in prices…